On September 27, 2018, Titanium Metals Corporation (TIMET) filed a Section 232 petition alleging that the quantity or circumstances of U.S. titanium sponge imports threaten to impair national security. On March 4, 2019, Secretary of Commerce Wilbur Ross announced that the petition had been accepted and an investigation initiated. Ross sent a letter to Acting Secretary of Defense Patrick Shanahan informing him of the investigation in response to this petition, stating that the Department of Commerce during the course of the investigation would consult with the Department of Defense on methodological and policy issues of national security concern.
In his announcement, Ross stated, “Titanium sponge has uses in a wide range of defense applications, from helicopter blades and tank armor to fighter jet airframes and engines.” Titanium sponge is the primary form of titanium metal from which almost all other titanium products are made. Titanium is used in the production of military aircraft, space vehicles, satellites, naval vessels, missiles and munitions. It is also widely used in critical infrastructure and commercial applications such as civilian aircraft, chemical plants, oil and gas plants, electric power and desalination plants, building structures, automobile products and biomedical devices. According to the Department of Commerce, imports account for more than 60 percent of U.S. titanium sponge consumption. Currently only one facility in the United States has the capacity to process titanium ore into the sponge used in manufacturing. Titanium sponge is difficult to stockpile for long periods as it degrades, rendering the sponge unsuitable for the most demanding military and aerospace applications.
This is the fifth Section 232 investigation initiated by President Donald Trump’s administration; before his administration, the last Section 232 investigation occurred in 2001. A Section 232 investigation is conducted under the authority of the Trade Expansion Act of 1962 to determine the effect of imports on U.S. national security. Once initiated, the secretary of Commerce must prepare a report for the president within 270 days of initiation on whether the importation of the article in question is in such quantities or under such circumstances as to threaten to impair the national security. The president can concur with or reject the secretary’s recommendations and take action to “adjust the imports of an article and its derivatives” or implement other non-trade related actions as deemed necessary.